Mathematics

Instructions

Instructions:
Week 5 Individual Assignment
Total Number of Questions – 12
Total Points: 6
1. You have twelve problems – on each tab of this Excel file.
2. Please show your work in the cells. Use Excel formulas instead of writing the values/answers directly in the cell.
The instructor will then know where you made a mistake and provide you valuable feedback and partial credit (if appropriate).

Question 1

Find the interest paid on a loan of $1,200 for three years at a simple interest rate of 5% per year.
How much money will you pay after three years?
Principal
Rate
Time
Simple Interest (SI)
Maturity Value

Question 2

Find the maturity value of a loan of $1,750 for 28 months at 9.8% simple interest per year.
Principal
Rate
Time — Please make sure that the time periods for Time and Rate match.
Simple Interest (SI)
Maturity Value

Question 3

Find the simple interest rate of a loan of $5,000 that is made for three years and requires $1,762.50 in interest.
Principal
Time
SI
Rate

Question 4

A loan of $16,840 is borrowed at 9% simple interest and is
repaid with $4,167.90 interest. What is the duration of the loan?
Principal
Rate
SI
Time

Question 5

How much money is borrowed if the interest rate is 9.25% simple interest
and the loan is made for 3.5 years and has $904.88 interest?
SI
Rate
Time
Principal

Question 6

Find the ordinary and exact interest for a loan of $1000 at a 5% annual
interest rate. The loan was made on March 15 and is due May 15.
Loan date Loan date
Loan Due Date Loan Due Date
Exact time days Exact time days
Principal Principal
Rate Rate
Time Time
Ordinary Simple Interest (SI) Exact Simple Interest (SI)

Question 7

Find the bank discount and proceeds using ordinary interest for a loan to Michelle Anders for $7,200
at 8.25% annual simple interest from August 8 to November 8.
Loan date
Loan Due Date
Exact time days
Face Value (F)
Discount Rate (D)
Time Period (T) years –> ‘Convert Exact time in days to years
Bank Discount (B)
Proceeds (P)

Question 8

What is the effective interest rate of a simple discount note for $8,000,
at an ordinary bank discount rate of 11%, for 120 days?
Face Value (F)
Discount Rate (D)
Time Period (T) years –> ‘Convert Exact time in days to years
Bank Discount (B)
Proceeds (P)
Rate

Question 9

SOLVED EXAMPLE
What is the effective interest rate for the first year for a loan of $20,000
for three years if the interest is compounded quarterly at a rate of 12%?
Quoted Rate 12.00% quarterly
No. of compounding periods per year 4 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR 12.55%
1. Ross Land has a loan of $8,500 compounded quarterly for four years at 6%. What is the effective interest rate for the first year for the loan?
Quoted Rate
No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR
2. Find the effective interest rate for the first year for a loan for four years compounded semiannually at an annual rate of 2%
Quoted Rate
No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR
3. What is the effective interest rate for the first year for a loan of $5,000 at 10% compounded daily for three years?
Quoted Rate
No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR
4. Depending on the issuer, a typical credit card agreement quotes an interest rate of 18 percent APR. Monthly payments are required.
What is the actual interest rate you pay on such a credit card?
Quoted Rate
No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR =EFFECT(B30, B31)
5. Find the effective interest rate for a loan of $3,500 at 10% interest compounded quarterly.
Quoted Rate
No. of compounding periods per year For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
EAR =EFFECT(B36, B37)

Question 10

SOLVED EXAMPLE
Tim Bowling has $20,000 invested for three years at a 5.25% annual rate compounded daily.
How much interest will he earn?
Initial Investment (PV) $20,000
Quoted Rate 5.25%
Compounding Frequency Daily Choose one
Number of compoundings (m) 365 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
Quoted Rate divided by m = RATE 0.0144%
Number of Years 3
NPER (Num. of years * m) 1095
Ending Amount (FV) $23,411.35
Compound Interest $3,411.35
Exercise
Find the future value of a $15,000 money market investment at 2.8% annual interest compounded daily for three years.
Initial Investment (PV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Ending Amount (FV)
Compound Interest

Question 11

SOLVED EXAMPLE
The Holiday Boutique would like to put away some of the holiday
profits to save for a planned expansion. A total of $8,000 is needed in three years. How much
money in a 5.2% three-year certificate of deposit that is compounded monthly must be invested
now to have the $8,000 in three years?
Future Value Needed (FV) $8,000
Quoted Rate 5.2%
Compounding Frequency Monthly Choose one
Number of compoundings (m) 12 For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
Quoted Rate divided by m = RATE 0.4333%
Number of Years 3
NPER (Num. of years * m) 36
Amount Invested Now (PV) $6,846.78
Exercise
How much should be invested now to have $15,000 in six years if interest is 4% compounded quarterly?
Future Value Needed (FV)
Quoted Rate
Compounding Frequency
Number of compoundings (m)
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Amount Invested Now (PV)

Question 12

Jamie Juarez needs $12,000 in 10 years for her daughter’s college education.
How much must be invested today at 2% annual interest compounded
semiannually to have the needed funds?
Future Value Needed (FV)
Quoted Rate
Compounding Frequency Choose one
Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Amount Invested Now (PV)
A loan of $8,000 for two acres of woodland is compounded quarterly at an annual
rate of 6% for five years. Find the compound amount and the compound interest.
Initial Investment (PV)
Quoted Rate
Compounding Frequency Choose one
Number of compoundings (m) For Quarterly, type 4; for semiannually, type 2; for annually, type 1; for monthly, type 12; for daily, type 365
Quoted Rate divided by m = RATE
Number of Years
NPER (Num. of years * m)
Ending Amount (FV)
Compound Interest

Order now and get 10% discount on all orders above $50 now!!The professional are ready and willing handle your assignment.

ORDER NOW »»